Olympia Le-Tan and Carven: casualties of impatience and unrealistic strategies

Carven and Olympia Le-Tan have become the latest victims of investors’ short-termism and lack of faith in the future, spooked by mounting losses and stagnating sales. The two brands could not be more different, one is a revival story, the other born from scratch, but both lacked a solid long-term development strategy and succumbed to impatient shareholders who pulled the plug.

Carven Fall/Winter 2018-19 - Photo: PixelFormula Carven went into administration at the end of May and since then, has delayed payments to suppliers and staff, including designer Serge Ruffieux, who excelled at Dior before joining the firm in 2017. “Very quickly, [the company’s controlling shareholders] considered that the investments that were required were much higher than they expected,” said a source with first-hand knowledge of the matter. “So, they simply stopped financing the brand and they are now trying to find a buyer.” The investors in question are Bluebell, a group that has made a fortune and a name for itself distributing luxury brands such as Louis Vuitton in Asia. Bluebell, which started investing in Carven in 2011, bought control in 2016, beating interest from private equity firm Neo Investment Partners which backs fashion brands such as Victoria Beckham and AMI Paris.

Bluebell is run by entrepreneur Michel Goemans and his wife Catherine who gave Carven’s executive reins to their daughter Sophie de Rougemont, even though she had never run a fashion brand before. One source close to the company said Michel Goemans and his daughter had a row over the company’s strategic direction and in retaliation, Goemans stopped financing the business. Two years after taking on Carven, the brand now gasps for cash and a few bidders have shown their hand including Bogart which has owned the brand’s perfume business since 2009, and several private equity teams. One is thought to be led by Emmanuel Diemoz, Balmain’s former CEO who left last year after the Italian brand was acquired by Qatar’s Mayhoola, owners of Valentino and backers of Anya Hindmarch.

Founded in 1945 by Carmen de Tommaso – who died aged 105 in 2015 – Carven dressed petite women and was associated with stripes and pink Vichy fabrics. Like other old French fashion brands such as Kering’s Balenciaga and Qatar’s Balmain, it is one of many labels that laid dormant for decades until new investors financed a creative reboot.

Carven was revived by entrepreneur Henri Sebaoun and designer Guillaume Henry, whose arrival at the brand in 2009 was orchestrated by Jean-Jacques Picart, former adviser to LVMH boss Bernard Arnault. The new Carven under Guillaume Henry carved itself an attractive niche with its girly, Parisian €300 dresses and within five years, it had become a success story. It was even briefly profitable when sales hit a high of €45 million in 2015. But after Henry left for Nina Ricci in 2014, Carven lost its unique fashion edge and Henry’s successors failed to seduce customers.

Carven’s annual revenues are now down to around half of what they were three years ago, or €20 million, and losses are understood to exceed €10 million, several sources have said. Serge Ruffieux’s work has been relatively well received by the press but it has not yet significantly boosted sales. Bluebell decided time was up after only two years running the label. Most successful fashion brands take many years to become profitable even when they are run by a strong creative and management duo. LVMH’s Céline – which took more than 15 years – and Kering’s Saint Laurent which took more than a decade to take off again, provide good examples.

Meanwhile, at Olympia Le-Tan, the main issue is that the company’s controlling shareholder and chief executive, a businessman called Grégory Bernard, thinks the brand can survive without its founding designer. Several sources close to the company have said that he had done all that he could to keep her away from the business. After years of tension and acrimony, on July 9th, designer Olympia Le-Tan announced on her Instagram account that she had left the brand she created less than a decade ago. Bernard, a man who has dabbled in film-making while financing Olympia Le-Tan’s business, gave her only 1% of the business when they embarked on their adventure in 2009. “She signed documents she probably should not have signed,” one source close to the matter said.

Olympia Le-Tan Spring/Summer 2017 - Photo: PixelFormula It was only when Audacia, the investment fund led by French entrepreneur Charles Beigbeder, invested €1 million in the company in 2015 that Le-Tan was given the possibility of acquiring a 24% stake. Audacia took a 25% holding and Bernard obtained 51%. The deal valued OLT, the company that runs the brand, at around €8 million, or around two times its annual revenue. Today, without Olympia, the business is worth significantly less, if anything at all, industry analysts say.

Bernard placed OLT into administration last September. Several sources aware of the situation said Olympia Le-Tan filed a complaint for moral harassment against OLT and alleges the company owes her several hundred thousand euros in revenue from her collaborations with brands such as Uniqlo and L’Oréal’s Lancôme. Olympia Le-Tan and Grégory Bernard did not respond to requests for comment.

Le-Tan, daughter of French illustrator Pierre Le-Tan, rose to fame thanks to her hand-embroidered “book-clutch” handbags and minaudières, endorsed by fashion editors at Vogue, Harper’s Bazaar and other glossies. In 2012, the brand expanded into ready-to-wear and now runs a boutique near the Palais-Royal gardens in central Paris. Without any involvement from the designer, the brand signed a license agreement with US toy manufacturer Hasbro for a Monopoly-inspired collection, recently launched in shops and online. “The Monopoly Collection will be an iconic start for a new strategy: closer to our partners and closer to our fans,” Grégory Bernard told The Licensing Book trade media.

Meanwhile, at Carven, it is not clear whether a new collection will be created in time for the next Paris Fashion Week in early autumn. The first round of bidders should hear back from the Paris Commercial Court handling the auction at the end of July.Both Carven and Olympia Le-Tan suffered from unrealistic strategies. With Carven, investors did not foresee the brand would lose so much money and require such sizeable investments, while with Olympia Le-Tan, its controlling shareholder believed a brand could thrive without its creative soul and driving force.